Private schools face ‘serious consequences’ from rates blow

A proposal to end charitable relief on business rates for independent schools risks forcing 6,000 pupils into the state sector, it is claimed. Sam Phipps reports

Scotland’s independent schools have warned the government that a proposal to increase bills on their business rates up to fivefold will make them “more elitist” by squeezing bursaries, as well as costing taxpayers heavily by forcing more pupils into the state sector.

A review by former Royal Bank of Scotland chair Ken Barclay, commissioned by the government, recommended ending charitable relief on business rates for independent schools from April 2020, in the interests of fairness.

They typically pay about 20 per cent of the total levy at the moment, whereas state schools are liable for the full amount.

However, private schools have been surprised by the announcement, saying they have worked hard in recent years to welcome more pupils from poorer backgrounds and make their facilities more available to local communities.

John Edward, director of the Scottish Council of Independent Schools, said the findings of the Barclay Review ran “completely contrary” to the charity test the Scottish Parliament has required all private schools undertake.

He said it would put Scottish independent schools at a competitive disadvantage in the UK and globally and limit their scope to admit the less well off: “It would set independent schools aside from all other charities for no sound legal, political, educational or economic reason and, most of all, it would most likely cost the Scottish taxpayer and government more than they seek to raise.

“The charity test for Scottish independent schools is the strictest in the world. Our high-attaining schools have worked incredibly hard over 12 years to meet that test.

“Any sudden alteration to rates relief would have very serious consequences for the employment of teachers, support staff and third party suppliers, as well as those 30,000 pupils educated.”

When a similar move was mooted in England several years ago it was estimated about 20 per cent of pupils at independent schools might have to switch to the state sector because of higher fees, Mr Edward said.

“If you translate that to Scotland, that would mean about 6,000 pupils needing places in local authority schools,” he added.

The recommendation has come amid a backdrop of sharp rises in average school fees in Scotland, combined with a 7.5 per cent drop in pupil numbers in the last decade.

The Barclay Review states that independent schools that are charities, which number about 70 in Scotland, benefit from reduced or zero rates bills, whereas council schools do not qualify and generally will pay rates.

“This is unfair and that inequality should end by removing eligibility for charity relief from all independent schools,” the report states.

“They will of course still retain charitable status and other benefits will continue to flow to them from that status,” the review adds.

The report admits the recommendations “may be controversial” but cites a precedent in Northern Ireland where certain educational, cultural and public sector bodies are prohibited from receiving charitable relief.

However, Mr Edward said it was wrong to compare independent schools with local authority ones on this issue because business rates bills were only a “nominal” expense for state schools, with the revenue going back into education kitties.

“We gave oral and written evidence to this review but it clearly hasn’t sunk in. We will raise these discrepancies with the Scottish government in due course,” Mr Edward added.

David Gray, head of Erskine Stewart’s Melville Schools in Edinburgh, said his schools funded bursaries for 150 children.

“If the 80 per cent reduction were to be removed that would have a considerable cost to the school and we would naturally have to pass that on to long-suffering and hard-working parents who (are) already saving the state a considerable amount of money by their children being educated outside the state system.

“We might have to raise the fees by one to 1.5 per cent – something like that.”

Melvyn Roffe, principal of George Watson’s College in Edinburgh, added: “I’m not entirely sure why we have been picked out. But I think the reaction to it looks pretty ideologically inspired.

“In a sense I would rather have the ideological debate – do you want independent schools to exist, yes or no – rather than the constant picking away.”

Mr Roffe said the change could force fees up by around £200 a year to pay for the extra bill of £460,000.

“If you want the schools to be more elitist then the best way to do it is to lump on lots of extra costs and sure enough they will become more elitist – despite our best efforts not to.”

Lisa Kerr, principal of Gordonstoun, said the proposed change would have a negative effect on Scotland’s economy and its young people’s education.

“It will disadvantage Scottish independent schools compared to those in England, and will impact on our ability to offer assisted places – the overwhelming majority of which are offered to Scottish students.”

A spokesman for Cosla, which represents local authorities, said: “This is not something we would wish to comment on at this stage.”

Soaring fees, fewer pupils at independents

Fees for independent schools in Scotland have soared by an average of 27 per cent in the last seven years but the sector insists this reflects “responsible management” amid a drop in pupil numbers.

Annual fees now total £14,574 compared with £11,410 in 2010/11.

Scotland’s most expensive school, Fettes College in Edinburgh, whose pupils have included former prime minister Tony Blair and the actress Tilda Swinton, has raised its fees for senior day pupils by five per cent to £26,790. For boarders it charges more than £33,000.

Gordonstoun in Moray, which Prince Charles attended, is the second most expensive school at £24,855-a-year for day pupils and more than £30,000 for boarders, while Merchiston Castle, in Edinburgh, has put fees up 3.5 per cent to £23,505.

The number of pupils at Scotland’s private schools reached its lowest level for almost 30 years in December – 29,647 – a drop of 7.5 per cent from 2007.

In greater Glasgow, the highest fees were at Belmont House, in Newton Mearns, East Renfrewshire, at £12,606, still a rise of 3.49 per cent.

More than four per cent of children now attend a school belonging to the Scottish Council of Independent Schools (SCIS).

John Edward, director of the SCIS, said: “Independent schools in Scotland are sensitive to the sacrifices that many parents make in order to afford school fees.

“As a result, they strive to do their utmost to deliver the best for their children and young people in a climate where costs like salaries, pensions and utilities are going up all the time along with the political uncertainty that Brexit brings.

Scottish private schools have also spent heavily on extra bursaries for pupils from poorer backgrounds in recent years, he said, with the 2016/17 total rising by £2 million on the previous year to more than £49 million.

Glenalmond in Perth and Kinross has frozen fees at £21,945. Elaine Logan, the school’s warden, said it “recognises affordability is a challenge for parents”.